Q&A with a loan-mod scams investigator

Notice of Default and Election to Sell Under Deed of Trust.
— Nelvin C. Cepeda

Mike Hurley, 60.

Position: Criminal investigator (half-time position.)

Family: Wife and two sons.

Education: Cal State University, Long Beach, 1974.

Hobbies: Staying active.

San Diego city has hired a new investigator who digs into businesses who take up-front fees before a modification is completed -- something that's illegal yet prevalent in California.

Mike Hurley worked in the San Diego Police Department for 30 years before taking on his new role as loan-mod scams investigator in mid-June. During his career, Hurley has investigated homicides, narcotics crimes and economic offenses. Before retiring, his last role in the department was a supervisor overseeing ID theft and forgery cases.

A $56,846 grant from the state paid for the new half-time position, which falls under the city attorney's office. San Diego was one of 14 agencies in California to receive money from a fund that helps cities and counties fight mortgage and foreclosure scams.

"Why is (this position) important?" said Assistant City Attorney Tricia Pummill. "Because of the recent events that happened in the real estate financial markets. So many people ending up with loans that are really burdensome and that affected (their ability) to pay these loans. ...We really saw an increase in the need for us to get involved to protect consumers."

A: I do a lot of computer research, trying to track down business owners, locations. I interview victims and witnesses. I check on different addresses. Then I put everything I do in a report and submit the report to the deputy city attorney.

Q: What kind of businesses do you look at?

A: Home-loan modification businesses. There are three crimes that are committed by fraudulent home-loan businesses. There are those who collect up-front fees; (it's illegal to charge fees for a home-loan modification before completing one.) Also, there are people who perform or assist in home-loan modifications without being licensed by the Department of Real Estate, or being an attorney. And the third (crime) is failing to include specific language in 14-point font telling clients they don't need a third-party to assist them in loan mods.

Q: What are you seeing more of?

A: All three. Every case involves all of those violations.

Q: Have you started on any cases?

A: I'm working five or six cases. I have one case that I submitted to file charges. (Reporter's note: Wilton C. Valverde, 43, has been hit with nine misdemeanor charges, including acting as a real estate broker or salesperson without a license and unlawful mortgage modification compensation.)

Q: What are some observations you’ve made about foreclosure and loan-modification fraud so far?

A: The word is not getting out that it's illegal for any company to charge for up-front fees prior to a modification being completed. People don't understand that, and they're being ripped off.